Fed surprise move heaves PHL shares over 6,500 level, PSEi up 3.73%

Shares prices on the Philippine Stock Exchange surged at opening bell Thursday, pushing the PSEi over the 6,500-level, after the US Federal Reserve staged a surprise to keep its $85-billion a month

buying program intact – indefinitely or until the world's biggest economy is well on its way to recovery.

The main PSEi soared by 236.18 points or 3.73 percent to 6,570.14 as of 10:01 a.m.

Summit Securities Inc. president Harry Liu said the Fed decision to stick to its stimulus program has led global stock markets to advance.

"Fed's action is why the US stocks recorded new highs because investors welcomed that the stimulus is here to stay for a while," he said.

On the local market, Liu said investors cheered the decision, driving the PSEi to break resistance levels in the short term.

However, he warned that while "everything is intact" in the long term, a consolidation in the medium term is in the offing.

Reuters reported the US Fed said on Wednesday (Thursday, PHL time) – after a two-day Federal Open Market Committee meeting – it would continue buying bonds at $85 billion a month.

In a news conference following the announcement, Fed Chairman Ben Bernanke said the plan is to maintain a highly accommodative policy, with the central bank looking to see if its basic outlook for the economy is confirmed. Only then would the most powerful central bank in the world take the first steps to remove the stimulus, Reuters added.

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